Tech giants pour record sums into artificial intelligence as markets demand clearer returns
Amazon.com Inc's (NASDAQ:AMZN) share price plunged more than 10% in after-hours trading on Thursday, erasing $250 billion from its market value, after the company unveiled plans to spend a record $200 billion this year, largely on artificial intelligence.
The e-commerce and cloud computing group said the investment (up sharply from $125 billion in 2025) would focus on AI systems, semiconductor chips, robotics and satellite infrastructure.
Chief executive Andy Jassy described AI as an “unusual opportunity” and told analysts the technology would eventually reinvent every aspect of Amazon’s customer experience.
But the scale of the spending, which Jassy admitted would be “aggressive,” appeared to rattle investors already wary of ballooning costs across the tech sector.
Amazon’s announcement followed similar pledges from rival firms.
Meta plans to spend up to $135 billion this year on AI infrastructure, while Alphabet-owned Google is increasing its capital expenditure to $185 billion, more than double last year’s total.
Microsoft has already spent more than $72 billion on AI-related hiring and development, with no signs of slowing.
Together, the four companies are on course to spend over $650 billion in 2026 on AI and related technologies.
Although executives at each firm have insisted the spending will unlock new growth, markets are growing uneasy.
Despite reporting solid profits, all four saw share prices fall this week. The broader S&P 500 index dipped more than 1% on Thursday, adding to declines from last week’s record high.